General Motors will soon be able to add at least $ 1 billion to its treasury.
This is because GM owns 18.6 million Class A shares of Lyft Inc., making it one of the biggest investors in
Lyft is targeting the initial public offering expected on Friday to has brought $ 62 to $ 68 per share, the Driving Service said.
If it gets so much, GM's investment at the beginning costs $ 1.16 billion to $ 1.27 billion – a big win considering GM invests $ 500 million in Lyft in January 201
They are convinced that they strongly decide on the potential future valuation of Lyft's shares as a company, "said David Sowerby, Managing Director of Ancora's Welfare Management Company in Bloomfield Hills. More, GM, Lyft Adds 350 Lyft Express Drivers to Detroit big investment "at the Orion plant
Lyft's driver has the Lyft logo before installing it on his Pittsburgh car in January 2018.
GM's CEO, Mara Bara, told CNBC on March 22 that he will follow IPO "Lyft" with great interest as "significant investor". 19659003] But she did not say what GM would do with her investment in Lyft.
GM has several options:
- He can hold his shares for strategic purposes.
- Can sell all or part of it to reinvest at GM.
- He can sell his share and sit on money or return it to shareholders by a redemption or dividend, Sowerby said.
"Without being behind the curtain, I would have thought that whatever the purpose of the future price of Lyft's shares, in such a high security, I would not be surprised if they took any profit [WhatNottoDo
David Wiston, a private equity analyst at Morningstar in Chicago, said GM's most difficult choice was whether to immediately sell or hold the deal in the hope that the price of Lyft's shares would rise after the IPO
"It's safer to sell now than to bet on what the action will do," Wisconsin said. "But if, let's say, three to five years, worth $ 3 billion, "this may be bitter
But some say the sale of shares for redemption of ordinary GM shares or a special dividend is a bad step GM has cut about 8,000 jobs, some of which through voluntary redemptions and mostly through forced interruptions, and is in motion at five factories in North America, affecting 6,200 jobs. This is part of a major restructuring that GM said will save $ 2.5 billion this year.
If GM sells the shares and profits, "optics will be bad right now with what's going on in GM with the restructuring," said David Kudla, chief executive officer and chief investment strategist at Mainstay Capital Management.